Policy Information
Segregation of Duties
Effective
March 1 2015
Number
Applicability
This policy applies to University Employees administrators faculty and staff
Administrative Authority
Vice President for Finance and Chief Financial Officer
Responsible Unit
Controller's Office
Service Complex, Louisville, KY 40292
502-852-6164
controll@louisville.edu
History
*This policy was approved by the Finance Committee on July 12, 2018 and the Board of Trustees on July 19, 2018.
Revision Date(s): May 3, 2020
Reviewed Date(s): May 3, 2020
Categories
Statement
Departmental business functions should be distributed between departmental staff to ensure that adequate segregation of duties exist within the University's business units, service centers, or other internal operations which have the responsibility and authority to:
- Access cash.
- Make purchases through accounts payable or procurement cards.
- Manage payroll.
- Authorize disbursements.
- Manage revenues, billing, sales, collection of receivables or assets.
Reasoning
Segregation of duties is a fundamental component of an effective system of internal control within a business or organization. This policy addresses the segregation of duties as they relate to financial transactions and custody of assets.
Definitions
Segregation of duties is broadly defined as the separation of the custodial, record-keeping and authorization functions of a business process to ensure that no individual employee has the ability to initiate, approve, record, and reconcile departmental transactions or possess overall control over major functions within a business unit.